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An old truism says “geography is destiny,” and it certainly applies to Texas’ importance as a center for international trade.

Our central position in the continent’s road and rail grid, numerous seaports and a long border with Mexico all have helped Texas become a hub for international trade, and the nation’s top exporting state for 14 consecutive years.

And all this trade moves through one or more of Texas’ 29 official “ports of entry” — seaports, airports, border crossings and multi-modal facilities that offer train, air and roadway links to the state and nation (Exhibit 1).

Texas Comptroller Glenn Hegar recently completed a six-city tour of Texas ports of entry to highlight a new agency study that quantifies the economic benefits our state derives from these facilities. The Comptroller’s office estimates that nearly $650 billion in trade facilitated by Texas ports in 2015 directly or indirectly supported nearly 1.6 million Texas jobs and added $224.3 billion to our gross state product, or GSP (Exhibit 2).

“Texas ports of entry are absolutely essential to our economy,” Hegar says. “Every part of our state relies on them, from our largest cities to our smallest towns. They support agricultural production, manufacturing, the energy business and more. No matter where you are in Texas, you can see the benefits of foreign trade.”

In this article, we’ll examine several of our ports of entry in detail.

More Fiscal Notes

Exhibit 1: Texas Ports of Entry

According to the Texas Office of the Governor, Texas has 29 official ports of entry.View the list.

Source: Texas Office of the Governor

Exhibit 2: Economic Contributions of Texas Ports

International Trade Through Selected Texas Ports of Entry, 2015

Port of Entry

Texas Jobs Supported by Trade at Port

Trade Contribution to Gross State Product, 2015

Port of Beaumont

30,700

$4,389,582,000

Port of Corpus Christi

63,100

9,014,093,000

Dallas-Forth Worth International Airport

135,500

19,363,245,000

El Paso

128,500

18,368,296,000

Port of Freeport

25,800

3,689,417,000

Port of Galveston

20,400

2,909,234,000

Hidalgo

53,300

7,621,802,000

Port of Houston

509,200

72,789,788,000

Houston George Bush Intercontinental Airport

37,800

5,409,516,000

Laredo

363,700

51,998,826,000

Port of Port Arthur

67,800

9,698,158,000

Other Texas Ports of Entry

133,300

19,060,000,000

Total

1,569,100

224,312,000,000

Operations at Intermodal Logistics Facilities

Port of Entry

Texas Jobs Supported by Port Operations

Contribution to Gross State Product, 2015

Port San Antonio

27,000

$2,988,882,000

Fort Worth Alliance Global Logistics Hub

67,000

6,427,430,000

Source: Texas Comptroller of Public Accounts

What's A Foreign Trade Zone?

Under federal law, Foreign Trade Zones (FTZs) enjoy certain special privileges concerning U.S. customs duties and excise taxes. It’s a status intended to lower the costs of international trade for U.S. companies and thus encourage greater employment and capital investment. Goods brought into an FTZ are not subject to duties and excise taxes until they are sent to domestic markets; products assembled or manufactured within an FTZ may be exported without paying these duties and taxes. FTZs often enjoy state and local tax benefits as well.

Laredo Port of Entry

Laredo’s five border crossings, including four vehicular bridges and one rail bridge, together represent the most economically important of 11 ports of entry along Texas’ 1,254-mile-long border with Mexico, America’s second-largest trading partner after China.

Laredo has been a commercial doorway to Mexico for decades, but its importance increased greatly after the 1992 signing of the North American Free Trade Agreement (NAFTA). In 2015, Laredo accounted for about $205 billion or 32.5 percent of all international trade in Texas.

Laredo’s World Trade Bridge is used by more than 12,000 commercial vehicles daily.

Source: Texas Center for Border Economic and Enterprise Development

In that year, about 3,600 trains and 2 million trucks entered the U.S. through Laredo. Major trade activity at the port includes the movement of automotive parts, motor vehicles and petroleum products as well as associated warehousing and logistics facilities.

In addition to commercial trade, Laredo benefits greatly from other activities associated with the border crossing, including cross-border shopping that supports local merchants. One estimate has attributed about $2 billion in annual Border-area retail sales to Mexican nationals visiting the U.S. to shop, about 39 percent of it in Laredo.

The Comptroller’s office estimates that activities associated with the Laredo port of entry contribute 363,000 net jobs and at least $52 billion in GSP to the Texas economy.

Port Freeport

The port of Freeport, originally established in 1925, is the only deep-water port on the U.S. Gulf Coast presently prepared to receive the large container ships now beginning to visit the Gulf due to the recent expansion of the Panama Canal. To further accommodate these ships, the port has embarked on a $30 million dredging project to widen its main channel and has received federal approval to deepen its harbor.

Of all Texas ports, Freeport is poised to benefit most from bigger ships traversing the Panama Canal
due to its potential channel depth.

The recent opening of an automobile shipment facility operated by a subsidiary of Höegh Autoliners has made Port Freeport a major player in the export of U.S. vehicles, particularly to the Middle East; in 2015, the port exported more than $1 billion in such cargo to Saudi Arabia, Qatar and Kuwait.

Trade associated with the Freeport port of entry supports an estimated 26,000 Texas jobs and contributes at least $3.7 billion in GSP.

Port of Port Arthur

In 2015, the Port of Port Arthur accounted for nearly 9 percent of Texas’ seaborne trade, valued at about $18.2 billion. The port is one of the nation’s busiest for fuels and other petrochemical products produced by nearby refineries, including an Aramco-Motiva plant that is North America’s largest crude-oil refinery. The port is covered by an FTZ and is a designated U.S. “strategic” port that regularly handles military shipping.

The Port of Port Arthur
is part of the
Sabine-Neches Waterway,
which recently surpassed the Port of New York
and New Jersey
in terms of shipments:
more than 129 billion tons.

Source: U.S. Army Corps of Engineers

About 2,000 people in the Port Arthur area are directly employed in port-related activities, including employees of the port itself, workers at private refinery terminals and port and waterway security personnel, as well as rail workers, truck drivers, tug and barge operators, marine agents, dredging operators and harbor pilots.

In May 2016, voters in the Port of Port Arthur Navigation District approved an $89 million bond issue to modernize and expand port facilities. Construction associated with these bonds will commence in 2017 and employ about 350 construction workers during the two-year project.

The Comptroller estimates trade associated with the Port of Port Arthur supports about 68,000 net Texas jobs and contributes at least $9.7 billion to the state’s GSP.

Port of Houston

The sprawling Port of Houston is a 25-mile-long industrial complex comprising more than 150 public and private terminals that support many industries, including the nation’s largest concentration of petrochemical refineries. It’s the nerve center of the Houston Ship Channel, the nation’s busiest waterway, which is navigated by more than 8,300 large ships and 231,000 smaller commercial craft each year.

The Port of Houston leads the nation in foreign waterborne tonnage and ranks 15th in the world. In 2015, the port handled 234.3 million tons of cargo. It’s the nation’s largest importer and exporter of petroleum and petroleum products.

Shipping activity at the port accounted for $137 billion in trade in 2015. Its terminals handle two-thirds of all container-ship traffic in the Gulf of Mexico. The port also includes the nation’s largest terminal for break-bulk cargo (large, individually loaded cargo items).

The FTZ covering the port is home to nearly 200 firms employing more than 17,300 Texans, including the largest U.S. facility for raw plastic resin exports. In all, private firms invested about $35 billion in the Port of Houston and surrounding industries between 2012 and 2016.

We estimate that trade associated with the Port of Houston seaport supports 509,000 net Texas jobs and adds at least $73 billion to GSP.

Since 2011, the Port of Houston has seen a shift from liquid bulk cargo to more
labor-intensive
containerized cargo and
steel, resulting in
a net increase in direct employment.

Sources: Port of Houston Authority and Martin Associates

Intermodal Logistics Facilities

Texas’ ports of entry include two intermodal logistics facilities, which offer air, road and rail transport links as well as FTZs for related manufacturing, processing, storage and assembly operations. These facilities see relatively little direct foreign trade but facilitate the movement of trade once in the country.

Port San Antonio offers air, road and rail links serving tenants including Boeing, which operates one of the world’s largest maintenance and repair facilities for military aircraft at the site. The port occupies the site of the former Kelly Air Force Base and has access to an 11,500-foot runway capable of handling the largest aircraft.

The port directly employs about 100 and houses more than 70 public- and private-sector tenants that employ about 12,000. Operations at Port San Antonio support an estimated 27,000 Texas jobs and contribute about $3 billion in GSP.

Port San Antonio’s industrial airport at Kelly Field boasts an 11,500-foot runway – the region’s longest.

Source: Port San Antonio

Another intermodal facility near Fort Worth, the Alliance Global Logistics Hub, is part of the $8 billion, 18,000-acre mixed-use development AllianceTexas, which grew around Fort Worth Alliance Airport, the world’s first industrial airport. Like Port San Antonio, the hub offers access to air and rail facilities and major highways as well as an FTZ for commercial operations related to the port.

Alliance Airport saw a record year for air cargo in 2015, loading and unloading 263 million pounds. A BNSF Railway facility at the logistics hub conducted more than 640,000 “lifts” in 2015 — that is, the movement of a cargo container onto or off of a train — with about 80 percent of this cargo coming from Asia through the U.S. West Coast. The facility receives about 2,800 trucks and 17 trains each day.

Operations at the Alliance Global Logistics Hub support an estimated 67,000 Texas jobs and contribute $6.4 billion to Texas GSP.

263 million pounds
of air cargo were loaded and unloaded at Alliance Airport in 2015.

Source: AllianceTexas

“The economic importance of Texas’ ports of entry extends well beyond our borders,” says Comptroller Hegar. “They provide employment and investment throughout Texas, but they also support jobs and industry throughout our nation as well as our trading partners’ economies.”
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